STOVEKRAFT - Stove Kraft

📊 NSE: STOVEKRAFT 🏢 Domestic Appliances 📅 Last Updated: 12/14/2025 13:45

💰 Financial Performance

Revenue Growth by Segment

For H1 FY26, revenue grew 11.2% YoY to INR 814.5 Cr. Segment value growth included Small Appliances at 19.9%, Non-stick Cookware at 13.0%, Induction Cooktops at 10.2%, Gas Cooktops at 9.6%, and Pressure Cookers at 6.6%. Volume growth varied significantly, with Gas Cooktops up 11.5% while Non-stick Cookware volumes declined 14.0% due to a shift toward higher Average Selling Price (ASP) products.

Geographic Revenue Split

While specific regional percentages are not disclosed, the company is intensifying its focus on North and West India for FY26 expansion. Exports contributed to the revenue mix, with a specific focus on ramping up the IKEA order and expanding the 'Pigeon' brand footprint globally.

Profitability Margins

Gross margins improved to 38.1% in FY25 from 36.9% in FY24, and reached 38.5% in Q2 FY26. This 120-160 bps improvement is driven by a higher share of in-house manufacturing and reduced dependence on traded goods. PAT margin stood at 2.7% in FY25 (INR 38.5 Cr) compared to 2.5% in FY24 (INR 34.1 Cr).

EBITDA Margin

EBITDA margin for H1 FY26 was 11.3%, a 33 bps improvement over 11.0% in H1 FY25. For the full year FY25, EBITDA margin was 10.4% (INR 151.1 Cr) vs 8.7% (INR 118.9 Cr) in FY24, reflecting better operating leverage as manufacturing utilization increases.

Capital Expenditure

The company has been investing heavily in manufacturing infrastructure over the last four years, which led to a temporary deterioration in ROE and ROCE. Specific INR Cr capex for the upcoming period is not disclosed, but the focus is on achieving double-digit return ratios through these investments.

Credit Rating & Borrowing

ICRA reaffirmed ratings based on the company's established market position. Finance costs increased 29.1% YoY to INR 31.0 Cr in FY25 from INR 24.0 Cr in FY24, driven by higher borrowing requirements for working capital and lease liabilities.

⚙️ Operational Drivers

Raw Materials

Key raw materials include Aluminum and Steel, which are critical for the production of pressure cookers and cooktops. Fluctuations in these commodities directly impact the cost of goods sold, though the company has successfully passed on some costs through price hikes post-festive season.

Import Sources

The company is strategically lessening its dependence on imports to enhance profit margins and quicken working capital circulation. Specific countries of origin are not disclosed, but the shift is toward domestic backward integration.

Capacity Expansion

The company recently installed and fully operationalized a cast iron foundry to support the outdoor cooking and premium cookware categories. It is also expanding its retail footprint to 500 standalone Pigeon Stores by 2027.

Raw Material Costs

Cost of materials consumed was INR 259.5 Cr in Q2 FY26. The company maintains a gross margin of ~38% by managing the mix between manufactured and traded goods, with trading now accounting for only ~10% of revenue.

Manufacturing Efficiency

Manufacturing revenues now account for ~90% of total revenue, up from previous years. This shift has supported the OPM improvement to 8.7% in FY24 and 10.4% in FY25 by capturing the manufacturing value add.

Logistics & Distribution

The company utilizes multiple channels including general trade, e-commerce, and 500 planned exclusive retail outlets to ensure wide distribution across India's diverse market.

📈 Strategic Growth

Expected Growth Rate

13.40%

Growth Strategy

Growth will be achieved through a three-pronged strategy: expanding the standalone 'Pigeon' store network to 500 outlets by 2027, increasing export volumes (specifically IKEA), and diversifying into new categories like personal care (hair dryers/trimmers) and premium cast iron cookware.

Products & Services

Pressure cookers, induction cooktops, gas cooktops, non-stick cookware (ceramic and cast iron), small appliances (kettles, OTGs, air fryers), and personal care products (hair dryers, trimmers).

Brand Portfolio

Pigeon, Gilma, Black + Decker.

New Products/Services

Entered the personal care segment in January 2025 with hair dryers and trimmers. Also expanding the outdoor cooking and cast iron cookware ranges to capture higher-margin premium segments.

Market Expansion

Targeting 500 exclusive stores by 2027 and intensifying focus on the North and West Indian markets to balance its historically strong presence in South India.

Market Share & Ranking

The company is a leading brand in the value-for-money (VFM) kitchen appliance category in India, though specific percentage ranking is not provided.

Strategic Alliances

Maintains a significant supply relationship with IKEA for export markets and uses a franchise model for its retail store expansion.

🌍 External Factors

Industry Trends

The industry is shifting toward premiumization (higher ASP products like air fryers and OTGs) and omnichannel distribution. Stove Kraft is positioning itself by increasing its in-house manufacturing to 90% of revenue to control quality and costs.

Competitive Landscape

Faces intense competition from established players in the kitchen appliance segment. Competitors often compete on aggressive pricing in e-commerce channels.

Competitive Moat

The moat is built on a strong brand recall in the VFM segment, a massive distribution network, and a high degree of backward integration in manufacturing, which allows for competitive pricing that is often double-digit percentages lower than competitors online.

Macro Economic Sensitivity

Sensitive to consumer demand shifts and inflationary pressures on input costs. The Indian Government's 100% FDI allowance in electronic hardware manufacturing provides a favorable tailwind for long-term expansion.

Consumer Behavior

Increasing demand for convenience-based appliances (air fryers, induction) and a shift toward branded retail outlets (Pigeon Stores) for a better shopping experience.

Geopolitical Risks

Export growth in certain categories is currently 'at pause' while waiting for the stabilization of international tariffs.

⚖️ Regulatory & Governance

Industry Regulations

Complies with SEBI LODR Regulations and 100% FDI norms for electronic hardware manufacturing. Operations are subject to standard manufacturing and pollution control norms.

Environmental Compliance

The company has a Corporate Social Responsibility (CSR) policy in place as per Section 135 of the Companies Act, 2013.

Taxation Policy Impact

The effective tax rate resulted in a net tax expense of INR 10.28 Cr for FY25 on a PBT of INR 48.79 Cr, approximately 21%.

⚠️ Risk Analysis

Key Uncertainties

Volatility in commodity prices (Aluminum/Steel) and forex fluctuations are the primary uncertainties, with a potential impact on EBITDA margins of 50-100 bps if not managed.

Geographic Concentration Risk

Historically concentrated in South India, the company is actively diversifying into North and West India to mitigate regional demand risks.

Third Party Dependencies

Dependency on e-commerce platforms for a significant portion of sales, where pricing is highly competitive and subject to platform-driven discount cycles.